AMN 2018 Proxy Statement

COMPENSATION DISCUSSION AND ANALYSIS The actual consolidated revenue and consolidated AEBITDA targets on which the bonuses are based represented growth that the Compensation Committee believed exceeded general organic growth rates in the markets we serve. The threshold for a named executive officer to receive a bonus on the consolidated financial metrics required achievement of 90% of our 2017 Ops Plan target for each of Pre-Bonus AEBITDA (“ Pre-Bonus AEBITDA ”) (4) and consolidated revenue. For information on the calculation of Pre-Bonus AEBITDA, and a reconciliation of it to our 2017 net income, please see Exhibit B to this proxy statement (page B-1). Additionally, receipt of the target bonus amount for each financial metric required the Company to meet 100% of our 2017 Ops Plan for that metric, which represented roughly 8% year-over-year growth for both consolidated revenue and AEBITDA (all of which constituted organic growth). Metric 2017 Ops Plan Target 2017 Results $ Variance From 2017 Ops Plan Target % Variance From 2017 Ops Plan Target Consolidated Revenue 2,050,000 1,988,454 (61,545) (3) Pre-Bonus AEBITDA 262,965 263,411 446 0 2017 Bonus Plan Payouts. We have set forth a table below ($ in thousands) that summarizes how we performed against the 2017 Ops Plan financial performance metrics that were utilized, in whole or in part, in determining the Financial Component portion of our named executive officers’ bonuses. With respect to the second component, the Compensation Committee believes our named executive officers provided strong leadership in 2017 that resulted in good financial and operational results for the Company on both an absolute and relative basis (i.e., compared to our executive compensation peers, the Russell 2000). We continued to deliver annual organic revenue, which grew by 4% year-over-year, and AEBITDA growth of 8%, as well as a cumulative total shareholder return of 33 % . However, our Compensation Committee also recognizes that the future poses additional challenges that are distinct from the past. For that reason, among others, the Compensation Committee decided to tie the RP/Leadership Component for each named executive officer in 2017 to the implementation of new front and back office enterprise information technology systems across the Company’s portfolio. Given the importance of this initiative, the Compensation Committee decided to base the achievement of the RP/Leadership Component for each named executive officer in 2017 primarily on the achievement of a successful implementation to the upgraded platform. We now anticipate that the new platform will launch in the first half of 2018 in our locum tenens segment. As a result, we will not determine the amount that any named executive officer earns under this component of the 2017 bonus until June 2018, and we will report the amount that we pay under this component, if any, as compensation for 2018. (4) We use Pre-Bonus Adjusted EBITDA solely to determine bonuses. Pre-Bonus Adjusted EBITDA excludes from Adjusted EBITDA the payment of bonuses and, other extraordinary items not contemplated in the 2017 Ops Plan. We identify this measurement as “Pre-Bonus AEBITDA” in this proxy statement. Under no circumstances should Pre-Bonus AEBITDA be used to substitute for any other financial metric and is used by us solely to determine bonus amounts. AMN HEALTHCARE SERVICES, INC. ⎪ 2018 Proxy Statement 41